Centre urges space startup collaborations to build scale, boost revenue

The ‘soft’ directive comes as an attempt to help boost revenue generation among the startups, many of which would soon be completing 10 years of being registered and become ineligible for sops meant for startups, two senior government officials with direct knowledge of the matter told Mint.

“Space is undoubtedly a complicated sector, and it is understandably difficult to expect startups to come in and start raking in billions of dollars from the get-go, just because the government has opened the sector up. But, one key thing that the Department of Space (DoS) is looking to address is that for many space startups, they are soon going to complete 10 years of being incorporated in India. Once this decadal period is over, these firms will come under the complete liabilities of being a business registered in India—which means that they will no longer be able to reap the benefits of being a startup. For this reason, the DoS, urged by the Prime Minister’s Office, has asked the entire ecosystem of private space startups to strike collaborations, and form consortiums and partnerships in a bid to improve the quantum of revenue that they can generate," one of the two officials cited above said.

Also Read: India puts space station on priority eyeing geopolitical gains

Citing revenue and value generation in the domestic space market as the key objective behind this “soft" directive, the second official said, “Economies that are leading spacefarers in the world right now already have entities that can supply their own nation, and also have older private space firms that have proven themselves in space. For India, this will take its own due course—and it is unreasonable to expect that India will draw away business from the US, the European Union or Japan. As a result, it’s important that our own startups start collaborating with each other to draw revenue, with the Centre as a key customer. This can help them lift-off, and also expedite the window for them to reach out to global markets for clients."

First such collaboration took placed this week

The first such collaboration was signed earlier this week, when Bengaluru-headquartered private space intelligence startup Kawa Space spearheaded the move to create Bharat Space Collective. The group includes multi-industry entity Azista Industries, and two early-stage space applications startups—Kepler Aerospace and Dfy Graviti.

Also Read: Lack of internal demand hurting India's fledging space economy

Kris Nair, founder of Kawa Space, said, “By harnessing each other's strengths, we’re creating new categories within the space industry. This approach allows us to avoid unnecessary competition and instead channel our collective energy towards innovation. The collective marks an endeavour to establish a united and collaborative operating framework, with a shared focus on commercialising space opportunities together."

To be sure, the suggestion from the DoS to form collectives and collaborations is not an ‘order’ issued by the Centre, the officials, who spoke on the condition of anonymity, emphasised. “These are all private companies that one day want to become large enterprises. The government has no jurisdiction to tell them what to do. However, what we can do is to offer them advice, and especially leverage the world-class expertise and minds at the Indian Space Research Organisation (Isro). This is not an order, but more of an informal advisory," one of the officials said.

An email sent to the Department of Space seeking further clarity on the directive remained unanswered till press time.

Also Read: Indian Space Station, Chandrayaan-4 plans ready for govt approval: Isro chairman

Industry experts welcomed the move. Chaitanya Giri, fellow at think-tank Observer Research Foundation (ORF)’s Centre for Security, Strategy and Technology, said, “A collaborative move is good for India’s space startups. Conglomerates can not only help build better bodies to attract revenue—these can also help the startups build better capabilities and add more than just a single dimension to their business. Most space firms are now close to a decade old at least by registration—it’s imperative that they leverage the current market until they have the window of benefits."

In June this year, Mint reported that slim support from the Centre as a customer has impacted the sector negatively. Since then, Isro, along with nodal space body Indian National Space Promotions and Authorisation Centre (In-Space), has announced an $18-million space collaboration deal with the government of Australia in a bid to bring business opportunities for private space startups in India. Other initiatives, such as privatization of Isro’s small-capacity rocket, are also in the final stages.